Thursday 27 October 2016

Ryanair not entitled to legal costs in bid for millions it says it overpaid in air travel tax

Tim Healy

Published 09/02/2016 | 16:12


RYANAIR is not at this stage entitled to certain legal costs relating to it bid to get judgment against the State for millions it says it overpaid in air travel tax, the High Court ruled.

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Ryanair claimed it was entitled to judgment against the Revenue Commissioner and Minister for Finance over delays in complying with court orders that they provide information the airline said it required to progress its case.

The application became moot last month when the State provided the required information.

However, Mr Justice Max Barrett said he would not grant Ryanair the costs of making the application and said that should be dealt with at the outcome of its main action.

He said he would have rejected the airline's application to strike out the State parties' defence and enter judgment against them.  He would also have rejected Ryanair's application that the State defendants not be allowed to recover their legal costs of defending the case, this far, regardless of its eventual outcome.

First introduced in March 2009, the tax, which the airlines themselves had to collect by adding it to passenger ticket prices,  had two rates.  One was €2 for flights with destinations of 300 km or less from Dublin Airport and €10 for those further than that.

It had be revised following a complaint to the EU Commission that the higher rate breached EU regulations.

It was repealed in 2011 and replaced with a single €3 rate on every departure regardless of distance.

Ryanair and Aer Lingus separately sued the State seeking the return of the money they had paid up to March 2011 above the new rate.

Both airlines sought sums in excess of €60m.

Ryanair sought discovery of documents it needed for its case.

Unhappy with the progress of the State's efforts to do so, in December last it brought applications seeking judgment and strike out of the State defence.

In January, the required discovery was made by the State.

Mr Justice Barrett said, as a result, the issue of whether the State should not be allowed recover costs if it wins the case was now moot.

"However, it is only fair to note Ryanair has not exactly showered itself with glory when it comes to discharging its own discovery commitments".

The "race for discovery ended up being a close-run thing with Ryanair edging the State into second place", he said.

He noted the final costs to the State of making discovery and production of documentation, excluding solicitor and barrister costs, will be around €300,000.

He said the State had not been endeavouring to avoid discovery and there was no wilful default.  "The fact there has been delay is not of itself suggestive of any negligence", he said.

Even if the court was minded to punish the State for delay, and the court was not minded to, it still did not fall within the rules providing for the payment of costs as a result of untimely compliance with a discovery order.

"There is not a whiff of suggestion of any deliberate concealment on the part of the State", he said.

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